Thermal processing expert Bodycote has begun a £60m share buyback programme after reporting a strong growth in profit in its annual results.
The firm’s stock price jumped five per cent this morning on the news.
The Cheshire-based firm saw headline operating profit jump 17 per cent to £127.6m in 2023, while revenue grew eight per cent to over £800m.
Revenue growth was led by the group’s specialist technologies arm, which jumped 12 per cent excluding surcharges.
Through strong performance in aerospace, oil and gas and medical markets, Bodycote added that it had seen significant margin improvement, and was on track to achieve margins over 20 per cent in the medium term.
Earlier this year, the group completed its acquisition of US-based Lake City HT for £52m, with the group’s CEO Stephen Harris saying that integrating the firm would be a key area of focus this year.
Bodycote also returned to the strong levels of cash conversion which are more typical for the business, with free cash flow of £123m, up 46 per cent, which it said reflected improved working capital management.
“In 2023 we once again delivered strong revenue growth and improved financial performance, as well as making progress against our strategic focus areas,” said Harris.
He added: “Despite macroeconomic uncertainty we expect to deliver further progress in 2024. We anticipate a reduction in the level of energy surcharges, reflecting further normalisation of energy prices.
“The board remains confident in the group’s prospects for continued profitable growth.”